4.02.2010

Champagne Lanson and Luxury wines: when changing a name is more than a name change

(Find some more news on www.vitabella.fr). Champagne has a long tradition on the luxury wines' market. Strategies may differ but, in a troubled economy, champagne producers like Champagne Lanson should prepare actively their companies for a successful future. Let's consider the example of Boizel Chanoine Champagne which recently reported a 2009 net income that decreased by 22 percent to 16.1 million euros, impacted by a drop in sales. On the day of this announcement, BCC also informed the market that they would ask shareholders to approve a name change to Lanson-BCC. This announcement is not only about telling the financial market that BCC may change its name but it is also about sending strong and positive messages externally and internally.
Announcing the name change to Lanson BCC sends some messages externally:
- As Lanson is a famous name, BCC wants to make the company more easily recognizable and more attractive to international fund managers. It may increase liquidity which is important for a listed company, as it may bring a better valuation of the BCC shares, which means a better valuation of the entire company. In fact, changing name adds stock market lustre.
- Changing name is not only about describing in a better way the new combined business but more about acquiring a new image and corporate identity. Changing name to Lanson BCC is a way to upgrade the overall image of a group which is competing in an environment where every single champagne brand puts strong efforts to gain new markets and increase margins.
- Changing name is a way for the management to enjoy a good reputation among investors for its ability to acquire and manage a big company. With this move, the management shows to the market that the first step of integrating Lanson into the group has been successfully done. In fact, at the time of the acquisition, in 2006, some wondered why Boizel Chanoine Champagne, with brands such as Philipponnat, Alexandre Bonnet, Chanoine, De Venoge and Boizel needed to acquire a big champagne producer. Now the management wants to tell the market that adding Lanson - a champagne house founded in 1760 by François Delamotte - was a great achievement. It was not only about increasing the total group production by 6 million bottles per year, this acquisition was also about gaining in terms of image thanks to the quality of the Lanson champagnes and particularly its prestigious "Noble Cuvée" Vintage.
- Changing name sends a strong message for the future. The management shows how confident they are on capitalizing on Lanson brandname to improve shareholder value on medium and long-term. We can easily imagine that synergies have been found between Lanson and the rest of the group since this acquisition. But it now shows the management will be able to consider, in a better and faster way, every single synergy that could make their group stronger internationally.
And announcing a name change to Lanson BCC also sends some messages internally:
- With this name change, the message sent by the top management has a strong value. In fact, on the aspect of Human Resources, changing to Lanson BCC shows to Lanson employees that they are part of an entire group. Not only may it help the group to retain competent employees but it also may facilitate to attract new forces. All the employees of the group will consider being part of a strong, powerful and efficient company. With this new name, all group employees will really feel working for the N°2 champagne producer and may feel more involved into group's mission and future objectives.
- Changing name to Lanson BCC is also a way to more involve the Lanson management team on strategic goals. In fact, adding Lanson to the name shows a strong willingness from the top management to develop the image of Lanson globally, to manage Lanson brand reputation proactively and to get a positive impact on international sales and finally on the stock price. So, with this name change, the Lanson management team should understand their brand may be strongly marketed in the future.
Changing a name is definitely more than a name change. There are even some potential risks as increasing visibility of a strong commercial brand such as Lanson on the group level could indirectly affect the brand in the case of a group crisis or of an extremely bad share price evolution. But now this new name Lanson BCC still needs to be approved by shareholders. Then will come the time to celebrate. With Champagne, of course! (More news on www.vitabella.fr).